Business Summary
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Business for Sale
Sale of business of trading in cutting tools

Mandate ID: IN-9-MAG-18-2010-1
Transaction Type:
Business for Sale

Industry: Automotive


Sector: Cutting tools


SIC Code: 35450200 CUTTING TOOLS FOR MACHINE TOOLS


Country of Origin: India |


Target Countries: India


Target Areas: European Union, BRICS countries (emerging markets Brazil, Russia, India, China, South Africa)


Business Review

Supplier of cutting tools in India
Majority of sales to Japanese automotive manufacturers in India
Product mix is mostly Japanese and European brands
Operations cover North, South and West India regions
Family owned business since 1995. Currently being run by 2nd generation
No. of employees: 40 (approx.)

Products
Drills, grinding wheels, tap holders, boring bars, machine taps, milling tools, rotating tools, circular saw blades, knives, specialty lubricants, tool pre-setters, hydraulic chucks, workpiece clamping, etc.
Services
Product training, engineering
Financial Information

Revenue 2020: USD 4,500,000


Asking Price: on request


Revenue Multiple 2020: 0.00


Highlights

Consistently growing sales for past 10 years. Trend expected to continue in future (except for current period due to COVID and overall industry conditions. However, the Group expects recovery soon)

Strong fundamentals. 3 main business verticals, each vertical has a separate sales and back office team. In India, its rare to have a professionally run distributor company like the Group

Average Gross & Net Profit far exceeds the industry average. This has been possible due to the Group’s strong brand name, professional sales and marketing activities, high quality of customers (mostly OEM and their A-class Vendors) and widespread operations covering North, South and West India regions

Product mix is mostly Japanese and European brands which are high in quality and performance. The Group’s association with these brands have been in place for very long time and is expected to grow strongly in future too. With these brands investing in manufacturing facilities in India, sales are expected to grow significantly in next decade or so

Unique position within the industry. About 40% sales is achieved from 3 main Japanese OEM customers showing consistency and stable growth in revenue year on year

Major part of group turnover comes from Japanese automotive manufacturers in India. The Group is one of the biggest suppliers of cutting tools to companies like Maruti Suzuki and Honda Motorcycles. The team is well trained to work in professional environment and understands systems and processes really well

The Group follows clear rules for product share in total business to ensure there is no risk to organization in case association with any single product/brand is adversely affected. Maximum exposure of Group towards a single client is within 1/3rd. Most trading companies usually have 1-2 products contributing 80-100% revenue

Most of the employees have been associated with the Group for a long time and in general the Group does not face issues of employees leaving the organisation for want of higher salaries. The Group’s staff salary levels are higher than industry average, still their profitability is way better than most other companies in similar line of business

The Group maintains clean Books of Accounts and follows prudent business practice of valuing stocks and debtors at realistic values. The Group does not face collection issues due to quality of customers they work with. Stocks are monitored closely to ensure that ratio of non-moving stocks is minimal. Non-moving stocks are regularly written-off against profits of the same year, thereby books give a true and fair image of annual performance

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